Eurostar secures £ 250m bailout after collapse of demand

Eurostar secured a £ 250m ($ 354m) rescue package after warning that it was “fighting for survival” due to the coronavirus crisis.

The cross-channel rail operator said it had reached a funding agreement with shareholders and banks.

This includes SNCF, a French railway company that is a majority shareholder of the company.

The UK sold its stake in Eurostar to a private sector in 2015 for £ 757 million ($ 1.074 billion), and the government was not pressured to contribute to the bailout.

Secretary of Transportation Grant Shapps told Parliamentarians in February that the government was “very enthusiastic about the survival of Eurostar,” but claimed that “it was not our company,” and that the difficulty was “solved by shareholders. Should be a problem. “

After announcing the bailout agreement, CEO Jack Damaz said: “Everyone at Eurostar is encouraged by this strong support show from shareholders and banks that will enable us to continue to provide this important service to our passengers.

“Refinancing is an important factor that allows us to increase our services when the pandemic situation begins to improve.

“Eurostar will continue to work closely with the government to move towards secure relaxation of travel restrictions and streamlining border processes, enabling passengers to travel safely and seamlessly.

“Their coordinated actions and decisions are essential to the recovery of demand and the financial recovery of our business.”

The package includes a shareholder-guaranteed £ 150 million ($ 212 million) loan, £ 50 million ($ 70 million) additional capital from shareholders, and £ 50 million ($ 70 million). ) Consists of restructuring existing loan facilities.

In November 2020, Eurostar claimed that it “has been fighting for survival against a 95% decline in demand.”

Further as the UK government claimed that a taxpayer-funded scheme covering up to £ 8 million ($ 11 million) in business charges per major UK airport was “directly disadvantaged to airline competitors.” I asked for help.

During the pandemic, the company “experienced a more severe decline in demand than any other European rail operator or competing airline,” the company said in a statement on Tuesday.

For several months, there is one train per day in each direction between London and Paris and between London and Amsterdam via Brussels.

Prior to the virus crisis, daily timetables consisted of 56 trains.

The company announced that it will increase the number of trains on the London-Paris route from May 27 to two trains a day, and will add a third train from the end of June.

The company said the frequency would gradually increase over the summer as travel restrictions were relaxed.

We promised to focus on increasing passenger numbers on major routes between London, Paris, Brussels and Amsterdam and “maintaining strict cost controls” to ensure loan repayments.

Neil Lancefield

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